In December 2022, Aspiration, a San Francisco-based environmental firm, faced a financial crisis, prompting significant layoffs among its employees, including executives. During this tumultuous period, the firm suspended outgoing payments, including those owed to high-profile endorser, LA Clippers star Kawhi Leonard.
However, fresh allegations surfaced on the “Pablo Torre Finds Out” podcast aired last week, claiming that Dennis J. Wong, a minority owner of the Clippers, invested nearly $2 million in Aspiration on December 6, 2022. Shortly thereafter, Aspiration transferred $1.75 million to Leonard to fulfill his endorsement contract obligations.
The NBA has announced that it is investigating the Clippers, as well as majority owner Steve Ballmer and Leonard, to ascertain if there were any violations of league rules related to salary structure through Leonard’s link to Aspiration. These allegations were brought to light by former Aspiration employees during a podcast episode that aired on September 3.
Previous discussions on the podcast had revealed significant financial connections between the Clippers organization and Aspiration. Notably, it was disclosed that Ballmer himself had invested $50 million in Aspiration back in September 2021. Leonard’s endorsement contract, which was worth $28 million over four years beginning in April 2022, did not include a requirement for him to actively engage in promotional activities—making him almost fully hands-off, with a clause that prioritized his consent for any engagements he chose not to participate in.
Additionally, it was reported that Leonard was granted an extra $20 million worth of stock from the personal stock options of Aspiration’s co-founder, Joe Sanberg. In tandem with these developments, the Clippers officially introduced Aspiration as their new jersey and arena sponsor, a partnership valued at $300 million over a duration of 23 years.
Despite these allegations, both Ballmer and the Clippers have consistently denied any wrongdoing. Ballmer has claimed that he was misled by Sanberg, who has since agreed to plead guilty to federal fraud charges amidst Aspiration’s bankruptcy. The Clippers have hinted at evidence that supports their assertion of compliance with league salary regulations, although they have not disclosed this evidence publicly.
The NBA has made it clear that it will thoroughly investigate the situation, seeking solid evidence before determining whether penalties are warranted for the Clippers. According to league rules, teams are not permitted to supplement player salaries outside their officially sanctioned contracts. If any collusion or financial misconduct is uncovered, the potential repercussions for the Clippers could include hefty fines, the loss of future draft picks, or even the voiding of Leonard’s contract.
Allegations presented by former Aspiration finance officials during the podcast have drawn attention for raising serious concerns about the legitimacy of Wong’s investment. These officials, together with obtained bank statements, indicated that Wong’s $2 million payment came at a time when Aspiration was clearly in financial distress. One former employee remarked that it was “beyond shocking” that Wong would make an investment in a nearly bankrupt firm, particularly as it coincided with the payment to Leonard.
Leonard’s uncle and business manager, Dennis Robertson, expressed frustration over missed payments, with Aspiration finally disbursing funds to Leonard on December 15, the same day it laid off around 20% of its workforce, or approximately 100 employees. One of the former Aspiration employees pointed out the absurdity of the timing, questioning how an investment could be justified when the firm was on the brink of collapse.
Another anonymous former official echoed this disbelief, stating, “We’re broke, so to invest in a broke company is beyond me… What does $2 million buy you?” They elaborated on the ongoing uncertainty surrounding the company’s survival and whether employees would even be compensated, as they were inundated with calls from others seeking overdue payments.
It was emphasized that while Robertson was persistent about receiving payments, the employees’ greater concern lay in their own salaries amidst looming layoffs. A revealing cash forecast related to sponsor payments flagged payments to Leonard as “critical,” underscoring the precarious financial situation at Aspiration.
Following these developments, NBA Commissioner Adam Silver conveyed that a successful investigation would require compelling evidence linking the Clippers, Ballmer, and Leonard to potential improprieties.
His reluctance to impose penalties without solid proof reaffirms the complexities surrounding this case. Silver noted, “I would want anyone else in situations Mr. Ballmer is in now—and Kawhi, for that matter—to be treated the same way I would want to be treated if people were making allegations against me.”
As of last week, the NBA has engaged the law firm Wachtell, Lipton, Rosen & Katz to lead their inquiry into this matter. Aspiration’s financial woes, coupled with the serious implications of the latest allegations, put crucial pressure on the NBA to ensure a fair yet thorough investigation.
The spotlight remains firmly on the intersection of sports endorsements, corporate ethics, and financial compliance as the league navigates this potentially explosive situation.
image source from：nytimes
